F9-05·F9 — Marketing Finance
Marketing Budgeting — SOV, ESOV, and the Share Laws
The productive tension
Budget disciplineandgrowth ambition
The synthesis
Marketing budgeting is neither a percentage-of-sales discipline nor a blank-cheque growth bet. It is a share-of-voice investment thesis anchored in the empirical share laws — brands that invest media share ahead of market share grow, brands that invest behind shrink. The evidence-based marketer budgets by ambition, sanity-checks by percentage, and plans by objectives.
Learning objectives
- →Compare the four main marketing budgeting methods (percentage, objectives, parity, affordable)
- →Define SOV, SOM, and ESOV precisely
- →Explain the empirical ESOV-SOM relationship from Jones, Binet & Field, Dyson
- →Apply ESOV as a budget-setting framework
- →Recognise the procyclicality trap of percentage-of-sales budgeting
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